May 2009 - Posts

Recently, I contacted my credit card company to ask them to lower my interest rate. My rate was 9.875%, and when I got my statement, I noticed it was raised to 12.875%. I was told that they sent a letter notifying me that the interest rate was being raised. I told them I never received a letter and I'm not the type of person who throws mail away without reading it first. I further stated that if I did get a letter notifying me of an increase I would have called immediately. They refused to put the interest rate back to the 9.875% and told me the 12.975% was the best available interest rate they could offer to me. I told the gentleman that I didn't think it was fair to raise my rate because I pay the bill the same day I receive it. I always make a double payment and sometimes a triple payment and I don't think its fair that I now have to pay a higher interest rate to compensate for the people who are not paying or are only making minimum payments. He still refused to lower the rate, so I closed my account.

The very next day I received another credit card statement from a different vendor and noticed the interest rate was 4% higher than it was the previous month. The interest rate on that credit card was also 9.875% and now it's up to 13.875%. I can't close this account because the balance is over $11,000. We transferred my husband's car loan onto this credit card because the interest we were paying on that loan was 18%. Our minimum payment is $200 per month and we've been paying $350 and sometimes more. Now it will take a little longer, but it's still better than the 18%.

I just want to make people aware that they need to check all of their credit card statements and contact their credit card companies and voice their opinion. I don't think it is fair that the people who pay their bills on time should be penalized for other people's lack of budgeting skills. In these tough times, we need to voice our opinions and fight for what is right. II was unemployed for five months because the company I was working for was sold to another company and our services were not required. During that time, we rearranged our budget, cut out any little extras we could and we did just fine. We never missed any payments or got behind on any of our bills. The new company contacted me and offered me my position back and we've kept on the rearranged budget and we're much better off financially because of the misfortune of being unemployed. Things happen for a reason, and I guess in our case, it worked out to our advantage. We are very fortunate.

-- Barb S.

Everyone is smart about something! That's why we have The Dollar Stretcher Guest Blog. If you have a story that could help save time or money, please send it by email to MyStory@stretcher.com.

Major credit card reform is now making its way to President Obama's desk for his signature. New regulations include putting restrictions on interest rate increases, giving greater notification about changes in your credit card, requiring payments be applied to the balance with the highest interest rates and curtailing the over-the-limit fees.

These regulations will dramatically reduce the ways banks and issuers earn revenue. But this law will not go into effect for nine months or the end of February 2010 at the earliest. How will issuers respond to these new regulations to make up the shortfall in their revenue?

Expect more increases in credit card interest rates. When the new regulations take effect, issuers cannot raise rates on a new customer for one year. So the introductory interest rates will likely be increased before February. But consumers are also likely to see interest increases in their existing accounts during this period. Issuers do not have any of these restrictions in place for nine months so we think they will continue to implement the policies that are currently in place. Expect issuers to quickly increase your APR if you do anything to show that you are a greater credit risk. They still have the ability to raise your interest rates at any time for any reason. If you miss a payment, are late on a payment, exceed your credit limit or even use too much of your credit limit, you could see an increase in your interest rate the very next billing period. Consumers need to get their credit card bills in early, pay more than the minimum amount and not use more than one-third of their credit limit.

A cutback in rewards and cash rebates. That has already been taking place since the start of 2009 and will likely continue through the year. Pay attention to your rewards by looking at the terms and conditions of your card. Issuers can make subtle changes in the reward program that are hard to spot, like changing a tier needed to reach a certain payout or requiring purchases over a longer period. Maximize the points you have and use them sooner rather than later because these could also be reduced. American Express recently notified cardholders that it is reducing its rewards for the Blue Cash card on spending over $6500 from 1.5% to 1.25%. (Note: see a number of changes made by credit card issuers in 2009 at www.lowcards.com/industry/recent-credit-card-changes.asp.)

More cards with annual fees. Approximately 20% of the credit cards have an annual fee at this time, but we expect that number to go up in the next year.

An increase in fees. While the regulations address the over-the-limit fees assessed on credit cards, they do not put any restrictions on fees for balance transfer, cash advance or late payments. This is already taking place as Bank of America and Discover announced that balance transfer fees will increase from 3% to 4% on June 1. Other issuers could follow.

All of these changes stress the importance for consumers to shop around for the best credit card. We do not expect all cards to assess an annual fee, cut back their rewards and increase their interest rate and fees. The competitive nature of the credit card industry will keep some of these changes in check. There will still be good credit cards out there. Consumers will need to be diligent in searching for a good card.

Bill Hardekopf is the founder of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. The LowCards.com Complete Credit Card Index is the most objective and comprehensive resource on the Internet which allows consumers to compare rates for all 1060 credit cards offered in this country.

A few years ago, I spent a long afternoon and a lot of money for a dress to wear to a Baptism. Unfortunately, the dress didn't hold up to a trip through the washing machine. So, I decided to keep an eye out at the thrift stores, when I was doing my weekly treasure hunt. Since I'm overweight, it took a while to find dress clothes that fit and flatter. I also wanted everything to be washable at home, either by hand or machine.

In the long run, I did buy a few mistakes, which were donated back to the thrift store or given to a friend. For example, a lime green silk dress that made my complexion look like an overripe tomato was donated back once I saw myself in natural light. And there was a black linen suit that would have taken extensive tailoring to fit me, but it looked great on a much taller friend of mine. There were other mistakes, too. For instance, there was a Talbot's wool jacket that I snatched up for $2 at a church sale, but it didn't go with anything else I owned. I can't forget the blue dress that made me look like a moldy sausage, etc. All told, the mistakes cost me around $30, but now I'm set. I have:

one basic black dress

one washable silk dress and coordinating soft jacket in plum

one navy dress

one long copper velour dress with matching jacket

one black and white dress

I spent less than $60 for all five of these dresses (and the mistakes). And I've worn them. I wore the navy dress to a Baptism, the copper dress to church on Christmas, and the black and white dress on Easter. Either the navy, plum or black would be appropriate for a funeral. However, they would work for all kinds of dressy occasions when paired with cheerful accessories. And, because I have a selection of dresses, I don't look the same in all the special-occaision photos.

Perhaps the best of these buys was the TravelSmith dress, which is a basic black dress in size 1x. The price tag was $1.50 at a church basement sale. I expect to get a lot of use out of that one.

-- contributed by DM

Everyone is smart about something! That's why we have The Dollar Stretcher Guest Blog. If you have a story that could help save time or money, please send it by email to MyStory@stretcher.com

About 10 years ago I went along with my college-age son when he chose and purchased a new car. He had saved for several years and had a sizeable down-payment, but he did have to finance several thousand dollars of the purchase.

We sat in the office of the loan officer for the car dealership while he ran some numbers. Ultimately, he showed us a monthly figure which was considerably higher than what we had estimated at home should be the approximate payment and interest.

When we seemed a little baffled and apparently appeared to be ready to go elsewhere to find a loan, he casually told us he might be able to tweak the numbers a little. Ultimately it became apparent that he had included in his numbers the following. And all without asking us if we wanted these extras:

3 year warranty protection plan

a special inscription in the windshield of the VIN in case the car was stolen

Scotchguard protection for the upholstery

There may have been another item, but I'm not sure what it was
anymore. I was hurt and very taken back, that this man, approximately 50 years
of age, who looked like a former NFL football player with all the glitzy rings on his fingers to go with it, would try to pull this over on a mother and son.I calmly stated that I wondered if it was legal for him to include those items without telling us. He immediately got huffy and told us it was "absolutely legal" for him to offer us such extras without telling us. " However", he said, he would "be willing to take them off if we did not want them".

We regretted later that we did close the deal with him because he did not deserve our business. We signed at a lower amount once he removed

the extras, and we walked away pretty bummed. But we were not savvy enough about loans to know whether we could walk out that night and

still have the car my son had saved for, wanted, and we had gotten a good price on.

Ultimately, months later, a good friend told me that he was a personal friend of that car dealership's owner. I told him our story, and our friend assured me he was going to relate our experience to the owner because the loan officer's behavior was totally unprofessional, if not illegal. So perhaps in the end, he got what he deserved.

We want to prevent other novice loan seekers from having the same experience.

Dollar Stretcher, Inc. does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for his or her own situation.